What's going wrong with my Luxrender Prism?
In my experience, rendering with Luxrender in Blender still (as of June 2017) means avoiding many features that innocently present themselves as "Blender-friendly" (like nodes, LuxCore API, materials conversion, etc.), and sticking to core Luxrender as much as is possible within Blender. In my opinion, this is largely because the two approaches to rendering are fundamentally different, making the "Blender friendly" attempts only obfuscate the fact that, in the end, to get the most out of Luxrender through Blender, the user must adapt to Luxrender's different perspective (on materials, lighting, rendering, outputting). This is not a criticism of Luxrender; I could say the same about how we adapt when going between Blender Internal and Cycles. That said, I do think Luxrender's "Use Materials Nodes" button is almost an invitation for confusion, since it doesn't even appear to give access to the specific things (like dispersion, for example) that make me sometimes choose Luxrender for a particular use.

The rules I tend to stick by when using Luxrender in Blender:


Don't use nodes
Use only Classic API (not LuxCore API) 
Use only LuxRender GUI
Don't use the "convert" Blender materials to Luxrender materials feature


In regard to dispersion (the prism effect you are looking for), all you need to do is go to the Materials tab, select material type "Glass", and turn up the "Cauchy B" slider.